Bajaj Finance Q2 Results: Profit Rises 26% On Higher Total Income
The company's Q2 total income rose 33% year-on-year to Rs 11,410 crore.
Bajaj Finance Ltd.'s second quarter profit rose in line with analysts' estimates due to higher total income.
The company's standalone net profit rose 25.6% year-on-year to Rs 3,105 crore in the quarter ended September, according to an exchange filing. Analysts polled by Bloomberg estimated a standalone net profit of Rs 3,251.16 crore.
Sequentially, it rose 4.96%.
The total income stood at Rs 11,410 crore as of Sept. 30, up 33%.
Net interest income, on a standalone basis, rose 26% year-on-year to Rs 8,059 crore.
Bajaj Finance’s asset quality was largely flat, with standalone gross NPA worsening by 5 basis points to 1.14%, quarter-on-quarter. On a consolidated basis too, gross NPA was higher by 4 basis points sequentially at 0.91%.
The net interest margin compressed 14 bps quarter-on-quarter.
Rajeev Jain, managing director of Bajaj Finance, said in an analysts call that the cost of funds has gone up and volatility remains.
The management expects NIM compression of 25-30 odd bps going forward, he said. However, the operating leverage is expected to play through for NIM compression as the company invests more in digital transformation, he said.
The consolidated net profit stood at Rs 3,551 crore, up 28% from a year ago.
The lender’s standalone assets under management grew by 35% year-on-year in Q2 FY24 and stood at Rs 2.15 lakh crore. The consolidated AUM also rose by 33% in the quarter ended September, and stood at Rs 2.90 lakh crore year-on-year.
Bajaj Finance's risk metrics across all businesses remained stable except rural B2C businesses, according to Jain.
For this, the company has taken risk actions as well which have resulted in muted AUM growth in first half of FY24, he said.
Jain highlighted that the company's short-term return-on-equity goals will not be compromised as its capital adequacy remains strong at 21.88%.
"We are capital prudent," he said.
The non-Bajaj auto financing product has gone live and so has the MFI (microfinance institution) pilot. The tractor financing will go live on Jan. 1, he added.
The MFI pilot, which is currently present in 12 locations, stays on track and the lender expects for it to go live across 100 locations by March 2024.
In terms of growth in unsecured personal loans, Jain said that the company is tracking data every month and so far, it is moderate in terms of value.
In the October monetary policy statement, the Reserve Bank of India Governor Shaktikanta Das raised some concerns about "very high growth" in unsecured personal loans by banks and non-banking financial companies.
